Standard & Poor's continued what has been an entire month of credit-friendly news with its reports on first-time default rates, which declined on consumer credit for the second straight month while nonpayments on second lien mortgages hit a new post-recession low.
According to HousingWire, S&P's consumer default index, which the research firm started in the summer of 2004, fell to 2.09 percent in February, down from 2.16 percent in January and 2.54 percent in February 2011, and first-time mortgage defaults were down from 2.08 percent in January to 2.02 percent in February, which is among the lowest post-recession rates.
In the spring of 2009, defaults on first and second mortgages topped out at 5.67 and 4.66 percent, respectively.
In addition, missed payments on second liens fell to 1.2 percent, the lowest level since June 2006, and even auto and bank card defaults fell to respective levels of 1.22 percent and 4.41 percent.
Among the major metropolitan areas, Chicago's year-over-year default index has fallen from 2.82 in to 2.71, Miami's from 6.05 to 4.54, and Dallas' from 1.78 to 1.61.
S&P, though, is not the only institution tracking the continuing health of homeowner finances. Earlier in the month, University Financial Associates released its latest Default Risk Index, which showed that the number of homeowners at risk of default is now at its lowest level in seven years. From 1996 to 2003, the Index never surpassed 100, but starting in the last two quarters of 2004, it ballooned to 200 by mid-2006 and peaked at 225 in mid-2007. It has decreased steadily since then, and its current rate of 128 brings it to pre-recessionary levels.
Even the Federal Reserve has shown a decrease in consumer risk. It latest Flow of Funds report, which measured numerous finances in the fourth quarter, reported residential mortgage debt dropping $42 billion, or 1.5 percent. Though it was the smallest drop since 2009, mortgage debt has now declined by $777 billion since 2006, with foreclosures, short sales and refinancings making up the largest share of the reductions.